The Central News Agency reported that, at the end of last year, China announced that it would carry out a “Peer to Peer Lending” platform regulation starting in June of 2018 (P2P occurs when online services match lenders with borrowers). From July 2 to 16, 131 of the P2P platforms were shut down leaving investors unable to withdraw cash while the owners went missing. The South China Morning Post reported that, in Shenzhen City alone, 22 P2P platforms were closed. One example is Heshidai (合時代), which has been running for 5 years since 2013 with accumulated financing activity of over 18 billion yuan (US$2.68 billion) and over 100,000 investors.

According to Sina, in China, P2P grew 200 percent from 2013 to 2017 because proper channels are lacking for Chinese citizens and small businesses to get loans from the bank. In 2014, only 9.6 percent of Chinese residents were able to get personal loans. At the same time, although small businesses contribute toward 60 percent of GDP and supply 80 percent of job opportunities, only 25 percent of them were able to get business loans. However, regulations for P2P lending are lacking. One of the scandals that turned into a Ponzi scheme was Ezubao lending. It was set up in 2014 and involved a $7.3 billion fund and 900,000 victims. It was shut down in February 2016 and 21 people were arrested.

It is expected that the regulatory activity will continue for a period of time and more P2P platforms will be impacted.